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B2Gold Reports Q3 2023 Results; 2023 Total Gold Production Guidance Reiterated; Full-Year Cash Operating Costs Forecast to be Below Guidance Range and Full-Year All-In Sustaining Costs Forecast to be at the Low End of Guidance Range

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B2Gold Reports Q3 2023 Results; 2023 Total Gold Production Guidance Reiterated; Full-Year Cash Operating Costs Forecast to be Below Guidance Range and Full-Year All-In Sustaining Costs Forecast to be at the Low End of Guidance Range

 

 

 

 

 

B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) (NSX: B2G) announces its operational and financial results for the third quarter of 2023. All dollar figures are in United States dollars unless otherwise indicated.

 

2023 Third Quarter Highlights

 

  • Total gold production of 242,838 ounces in Q3 2023, expected to increase in Q4 2023: Total gold production in Q3 2023 was 242,838 ounces, including 17,786 ounces of attributable production from Calibre Mining Corp. The Masbate and Otjikoto mines exceeded their expected production, which was offset by lower than expected production from the Fekola Mine due to slightly lower grade recovery and lower mill feed grade stemming from ore production delays out of Phase 6 of the Fekola pit following an intense precipitation event. Mining of the higher grade ore in Fekola Phase 6 resumed in October 2023 and fourth quarter of 2023 Fekola Mine production is expected to be significantly higher. All B2Gold operations are on track to meet or exceed annual production guidance ranges.
  • Total consolidated cash operating costs of $706 per gold ounce sold in Q3 2023: Total consolidated cash operating costs (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $706 per gold ounce sold during the third quarter with consolidated cash operating costs from the Company’s three operating mines of $689 per gold ounce sold. Year-to-date total consolidated cash operating costs of $637 per gold ounce sold remain well below the annual guidance range.
  • Total consolidated all-in sustaining costs of $1,272 per gold ounce sold in Q3 2023: Total consolidated all-in sustaining costs (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $1,272 per gold ounce sold during the third quarter. Year-to-date total consolidated all-in sustaining costs of $1,182 remain below the annual guidance range.
  • Tracking well to 2023 total production and cost guidance: For full-year 2023, the Company’s total gold production is forecast to be between 1,000,000 and 1,080,000 ounces (including 60,000 to 70,000 attributable ounces from Calibre). The Company’s total consolidated cash operating costs for the year (including estimated attributable results for Calibre) are forecast to be slightly below the guidance range of $670 and $730 per ounce and total consolidated all-in sustaining costs (including estimated attributable results for Calibre) are forecast to be at the low end of the guidance range of between $1,195 and $1,255 per ounce.
  • Attributable net loss of $0.03 per share; Adjusted attributable net income of $0.05 per share in Q3 2023: Net loss attributable to the shareholders of the Company in Q3 2023 of $43.0 million ($0.03 per share), primarily related to the $112 million non-cash impairment on the Gramalote Project as a result of the Company’s acquisition from AngloGold Ashanti Limited of the remaining 50% interest in the project; adjusted net income (see “Non-IFRS Measures”) attributable to the shareholders of the Company was $65 million ($0.05 per share).
  • Operating cash flow before working capital adjustments of $191 million in Q3 2023: Cash flow provided by operating activities before working capital adjustments was $191 million in the third quarter of 2023.
  • Robust financial position: At September 30, 2023, the Company had cash and cash equivalents of $310 million, working capital (defined as current assets less current liabilities) of $383 million, and minimal debt consisting of only equipment loans and lease obligations.
  • Q3 2023 dividend of $0.04 per share declared: The Company remains in a strong net positive cash position and paid a third quarter dividend of $0.04 per common share on September 29, 2023 (annualized rate of $0.16 per common share). Dividends paid totalled $45 million in the third quarter.
  • Goose Project construction on budget and on track for first gold pour in Q1 2025: In the third quarter of 2023, the Company completed Phase 1 camp construction and the earthworks required to extend the airstrip. The first concrete pour was completed in July with concrete and steel work in the mill area progressing ahead of schedule. Erection of the structural steel for the mill area, power house and truck shop is well underway, and cladding of the mill area is underway. The 2023 sealift was completed successfully in mid-October, unloading all planned material sealift materials required for the successful construction, commissioning and mining of the Goose Project.
  • Consolidated the Gramalote Project by acquiring AngloGold’s 50% interest: On September 18, 2023, the Company announced it had entered into a purchase agreement with AngloGold to acquire AngloGold’s 50% interest in the Gramalote Project located in the Department of Antioquia, Colombia. B2Gold now owns 100% of the Gramalote Project. B2Gold’s in-house projects team has commenced work on various smaller scale project development plans, with the goal of identifying a higher-return project than the previously contemplated joint venture development plan.

 

Third Quarter 2023 Results

  Three months ended Nine months ended
  September 30, September 30,
  2023 2022 2023 2022
         
Gold revenue ($ in thousands) 477,888 392,554 1,422,298 1,140,122
Net (loss) income ($ in thousands) (34,770) (21,234) 158,984 110,255
(Loss) earnings per share – basic(1) ($/ share) (0.03) (0.02) 0.10 0.09
(Loss) earnings per share – diluted(1) ($/ share) (0.03) (0.02) 0.10 0.09
Cash provided by operating activities ($ thousands) 110,204 93,118 509,010 325,307
Average realized gold price ($/ ounce) 1,920 1,711 1,929 1,810
Adjusted net income(1)(2) ($ in thousands) 64,840 31,996 256,506 142,340
Adjusted earnings per share(1)(2) – basic ($) 0.05 0.03 0.21 0.13
Consolidated operations results:        
Gold sold (ounces) 248,889 229,400 737,139 629,800
Gold produced (ounces) 225,052 214,903 721,732 620,234
Cash operating costs(2) ($/ gold ounce sold) 689 810 613 741
Cash operating costs(2) ($/ gold ounce produced) 741 798 638 749
Total cash costs(2) ($/ gold ounce sold) 827 926 752 862
All-in sustaining costs(2) ($/ gold ounce sold) 1,273 1,154 1,177 1,100
Operations results including equity investment in Calibre:        
Gold sold (ounces) 266,616 241,558 787,805 669,776
Gold produced (ounces) 242,838 227,016 772,395 660,004
Cash operating costs(2) ($/ gold ounce sold) 706 824 637 760
Cash operating costs(2) ($/ gold ounce produced) 755 815 661 767
Total cash costs(2) ($/ gold ounce sold) 840 939 772 878
All-in sustaining costs(2) ($/ gold ounce sold) 1,272 1,169 1,182 1,108

(1) Attributable to the shareholders of the Company.
(2) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.

 

Liquidity and Capital Resources

 

B2Gold continues to maintain a strong financial position and liquidity. At September 30, 2023, the Company had cash and cash equivalents of $310 million (December 31, 2022 – $652 million) and working capital (defined as current assets less current liabilities) of $383 million (December 31, 2022 – $802 million). At September 30, 2023, the full amount of the Company’s $700 million revolving credit facility (“RCF”) was undrawn and available. Subsequent to the end of the third quarter of 2023, the Company completed a drawdown of $50 million, leaving $650 million available for draw on its $700 million RCF.

 

Third Quarter 2023 Dividend

On September 5, 2023, B2Gold’s Board of Directors declared a cash dividend for the third quarter of 2023 of $0.04 per common share (or an expected $0.16 per share on an annualized basis), paid on September 29, 2023. The declaration and payment of future quarterly dividends remains at the discretion of the Board and will depend on the Company’s financial results, cash requirements, future prospects and other factors deemed relevant by the Board.

 

In the third quarter of 2023, the Company implemented a Dividend Reinvestment Plan. The DRIP provides B2Gold shareholders residing in Canada and the United States with the opportunity to have the cash dividends declared on all or some of their common shares automatically reinvested into additional common shares of the Company (the “Reinvestment Shares”) on an ongoing basis. Participation in the DRIP is optional and will not affect shareholders’ cash dividends unless they elect to participate in the DRIP. Dividends are only payable as and when declared by the Company’s Board of Directors. The benefits of enrolling in the DRIP include the convenience of automatic reinvestment of dividends into Reinvestment Shares; flexibility to enroll some or all common shares in the DRIP; and ability to acquire Reinvestment Shares without paying any brokerage fees. Participants in the DRIP will acquire Reinvestment Shares from the Company’s treasury at a price equal to the volume weighted average price of the Company’s common shares on the Toronto Stock Exchange for the five consecutive trading days immediately preceding a dividend payment date, subject to a possible discount, in the Company’s sole discretion, of up to 5%. For the dividend declared on September 5, 2023, a discount of 3% was offered.

 

Operations

 

Fekola Mine – Mali

  Three months ended Nine months ended
  September 30, September 30,
  2023 2022 2023 2022
         
Gold revenue ($ in thousands) 292,375 230,023 888,272 652,361
Gold sold (ounces) 152,239 135,150 460,139 361,800
Average realized gold price ($/ ounce) 1,921 1,702 1,930 1,803
Tonnes of ore milled 2,392,829 2,285,423 6,988,763 6,906,172
Grade (grams/ tonne) 1.82 1.90 2.17 1.72
Recovery (%) 92.1 93.1 91.9 92.9
Gold production (ounces) 128,942 129,933 447,233 354,647
Cash operating costs(1) ($/ gold ounce sold) 613 694 544 667
Cash operating costs(1) ($/ gold ounce produced) 688 728 561 667
Total cash costs(1) ($/ gold ounce sold) 773 829 706 809
All-in sustaining costs(1) ($/ gold ounce sold) 1,261 978 1,125 971
Capital expenditures ($ in thousands) 83,166 20,353 211,112 68,779
Exploration ($ in thousands) 3,392 1,706 13,848

(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.

 

The Fekola Mine in Mali (owned 80% by the Company and 20% by the State of Mali) produced 128,942 ounces in the third quarter, lower than expected due to slightly lower gold recovery and lower mill feed grade. The lower than expected mill feed grade stemmed from ore production delays out of Phase 6 of the Fekola pit, following an intense precipitation event that rendered high grade ore at the bottom of the pit temporarily inaccessible with the result that mill feed was supplemented by unbudgeted low grade stockpile material. Mining of the higher grade ore in Fekola Phase 6 resumed in October 2023 and fourth quarter production at the Fekola Mine is expected to be significantly higher with total production expected to be at the lower end of the guidance range of between 580,000 and 610,000 ounces. For the third quarter of 2023, mill feed grade was 1.82 grams per tonne, mill throughput was 2.39 million tonnes, and gold recovery averaged 92.1%.

 

The Fekola Mine’s cash operating costs (refer to “Non-IFRS Measures”) for the third quarter of 2023 were $688 per ounce produced ($613 per gold ounce sold). Cash operating costs per ounce produced for the third quarter of 2023 were slightly higher than expected as a result of the lower than anticipated gold production.

 

All-in sustaining costs (refer to “Non-IFRS Measures”) for the third quarter of 2023 for the Fekola Mine were $1,261 per gold ounce sold. All-in sustaining costs were slightly higher than expected as a result of higher than anticipated sustaining capital expenditures carried over from prior periods and new sustaining capital expenditure projects approved in 2023. Sustaining capital expenditures for 2023 are forecast to be approximately $50 million higher than guidance and include $11 million for solar plant expansion costs, and new mobile fleet and capital rebuild costs of approximately $35 million. The higher sustaining capital costs have been partially offset by $35 million in lower non-sustaining capital costs for Fekola Regional and Fekola underground development, which is now expected to be completed by the first quarter of 2025.

 

Capital expenditures in the third quarter of 2023 totalled $83 million primarily consisting of $26 million for mobile equipment purchases and rebuilds, $20 million for deferred stripping, $10 million for Fekola underground development, $10 million for the tailings facility raise project and $7 million for solar plant expansion.

 

The low-cost Fekola Complex in Mali includes both the Fekola Mine and Fekola Regional. At the Fekola Mine, ore will continue to be mined from the Fekola and Cardinal pits including mining of higher grade Fekola Phase 6 ore in the fourth quarter of 2023. Receipt of an exploitation license for the Bantako North permit area remains outstanding pending finalization of an implementation decree for the new 2023 Mining Code by the State of Mali. As a result, no production is forecast from Fekola Regional in 2023 (budgeted production was 18,000 ounces). Production from the Fekola and Cardinal pits has been accelerated to offset the delayed saprolite ore production from the Bantako North permit, and production guidance of between 580,000 and 610,000 ounces for the Fekola Complex for 2023 remains unchanged with total production expected to be at the lower end of the range. The new 2023 Mining Code is not expected to impact the matters that have been stabilized for the Fekola Mine operations under the existing Fekola mining convention entered into under the 2012 Mining Code, and the impact of a new 2023 Mining Code on the Fekola Regional licenses is still under review by the Company, pending issuance of a final implementation decree by the State of Mali. Fekola Complex cash operating costs are expected to be within the original guidance range of between $565 and $625 per ounce produced. As a result of the expected sustaining capital expenditure increases for the year, the Fekola Complex all-in sustaining cost guidance range is now expected to be between $1,175 and $1,235 per ounce sold (original guidance range of between $1,085 and $1,145 per ounce sold).

 

Masbate Mine – The Philippines

 

  Three months ended Nine months ended
  September 30, September 30,
  2023 2022 2023 2022
         
Gold revenue ($ in thousands) 97,556 107,936 265,839 290,704
Gold sold (ounces) 50,950 62,600 137,300 160,150
Average realized gold price ($/ ounce) 1,915 1,724 1,936 1,815
Tonnes of ore milled 2,155,170 1,888,722 6,224,572 5,885,163
Grade (grams/ tonne) 1.01 1.10 0.99 1.12
Recovery (%) 73.0 74.7 73.6 77.1
Gold production (ounces) 51,170 49,902 147,012 164,041
Cash operating costs(1) ($/ gold ounce sold) 865 879 854 815
Cash operating costs(1) ($/ gold ounce produced) 834 867 844 801
Total cash costs(1) ($/ gold ounce sold) 993 977 979 922
All-in sustaining costs(1) ($/ gold ounce sold) 1,124 1,110 1,152 1,076
Capital expenditures ($ in thousands) 5,896 10,158 20,947 29,908
Exploration ($ in thousands) 774 696 2,741 3,111

(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.

 

The Masbate Mine in the Philippines had a strong third quarter of 2023 gold production of 51,170 ounces, above expectations, as a result of improved ore grade and higher mill throughput. For the third quarter of 2023, mill feed grade was 1.01 g/t gold, mill throughput was 2.16 million tonnes, and gold recovery averaged 73.0%.

 

The Masbate Mine’s cash operating costs (refer to “Non-IFRS Measures”) for the third quarter of 2023 were $834 per ounce produced ($865 per gold ounce sold). Cash operating costs per ounce produced for the third quarter of 2023 were lower than expected as a result of higher than anticipated gold production, and lower than anticipated mining and processing costs resulting from lower than expected diesel and heavy fuel oil costs.

 

All-in sustaining costs (refer to “Non-IFRS Measures”) for the third quarter of 2023 were $1,124 per ounce sold. All-in sustaining costs for the third quarter of 2023 were lower than expected as a result of lower than anticipated cash operating costs, lower than anticipated sustaining capital expenditures and higher than expected gold ounces sold. The lower than expected sustaining capital expenditures were mainly a result of $4 million budgeted deferred stripping costs that are now expected to be a permanent saving in 2023.

 

Capital expenditures in the third quarter of 2023 totalled $6 million, primarily consisting of $3 million for mobile equipment purchases and rebuilds and $1 million for deferred stripping.

 

The Masbate Mine in the Philippines is expected to produce towards or above the higher end of its guidance range of between 170,000 and 190,000 ounces of gold in 2023. For the first nine months of 2023, Masbate’s cash operating costs per ounce and all-in sustaining costs per ounce were below expectations mainly due to lower fuel costs. Masbate’s cash operating costs per ounce for 2023 are now expected to be between $855 and $915 per ounce (original guidance range of between $985 and $1,045 per ounce) and all-in sustaining costs are now expected to be between $1,155 and $1,215 per ounce (original guidance range of between $1,370 and $1,430 per ounce).

 

Otjikoto Mine – Namibia

 

  Three months ended Nine months ended
  September 30, September 30,
  2023 2022 2023 2022
         
Gold revenue ($ in thousands) 87,957 54,595 268,187 197,057
Gold sold (ounces) 45,700 31,650 139,700 107,850
Average realized gold price ($/ ounce) 1,925 1,725 1,920 1,827
Tonnes of ore milled 855,740 877,249 2,554,747 2,573,360
Grade (grams/ tonne) 1.66 1.27 1.57 1.25
Recovery (%) 98.4 98.0 98.6 98.3
Gold production (ounces) 44,940 35,068 127,487 101,546
Cash operating costs(1) ($/ gold ounce sold) 744 1,165 603 881
Cash operating costs(1) ($/ gold ounce produced) 785 958 671 948
Total cash costs(1) ($/ gold ounce sold) 820 1,234 680 954
All-in sustaining costs(1) ($/ gold ounce sold) 1,178 1,625 1,074 1,247
Capital expenditures ($ in thousands) 13,290 20,292 46,266 59,575
Exploration ($ in thousands) 963 896 2,453 2,275

(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.

 

The Otjikoto Mine in Namibia, in which the Company holds a 90% interest, performed well during the third quarter of 2023, producing 44,940 ounces of gold, mainly due to improved processed grade as a result of high-grade ore mined from the Wolfshag underground mine. For the third quarter of 2023, mill feed grade was 1.66 g/t, mill throughput was 0.86 million tonnes, and gold recovery averaged 98.4%.

 

Production from the Wolfshag underground mine remained consistent during the third quarter of 2023, averaging over 1,259 tonnes per day at an average grade of 5.55 g/t. Otjikoto pit Phase 5 mine production volumes for the third quarter of 2023 were temporarily reduced due to a minor slope failure that resulted in haulage restrictions caused by a redesign of the main haulage ramp. The ramp has been reconstructed with no expected impact on the full-year budgeted 2023 gold production. As of the beginning of 2023, the Probable Mineral Reserve estimate for the Wolfshag deposit includes 203,000 ounces of gold in 1.1 million tonnes of ore at an average grade of 5.55 g/t gold. Open pit mining operations at the Otjikoto Mine are scheduled to ramp down in 2024 and conclude in 2025, while processing operations will continue until 2031, when economically viable stockpiles are forecast to be exhausted. Underground operations are currently projected to continue until 2026 with potential to extend underground operations if the ongoing underground exploration program is successful in identifying more underground mineral deposits.

 

Cash operating costs (refer to “Non-IFRS Measures”) for the third quarter of 2023 were $785 per gold ounce produced ($744 per ounce gold sold). Cash operating costs per ounce produced for the third quarter of 2023 were lower than expected as a result of higher production and a weaker Namibian dollar. Lower diesel fuel costs also contributed to the lower than anticipated cash operating costs per ounce produced.

 

All-in sustaining costs for the third quarter of 2023 were $1,178 per gold ounce sold. All-in sustaining costs for the third quarter of 2023 were lower than expected as a result of lower than anticipated cash operating costs, higher than anticipated gold ounces sold and lower than anticipated sustaining capital expenditures primarily related to the timing of deferred stripping and underground development.

 

Capital expenditures for the third quarter of 2023 totalled $13 million, consisting of $9 million for deferred stripping in the Otjikoto pit and $3 million for Wolfshag underground mine development.

 

The Otjikoto Mine in Namibia is expected to produce between 190,000 and 210,000 ounces of gold in 2023. For the first nine months of 2023, Otjikoto’s cash operating costs per ounce and all-in sustaining costs per ounce were below expectations due to a weaker Namibian dollar. Otjikoto’s cash operating costs per ounce for 2023 are now expected to be between $545 and $605 per ounce (original guidance range of between $590 and $650 per ounce) and all-in sustaining costs are now expected to be between $950 and $1,010 per ounce (original guidance range of between $1,080 and $1,140 per ounce).

 

Goose Project Development and Exploration

 

On April 19, 2023, the Company completed the acquisition of Sabina Gold & Silver (“Sabina”), resulting in the Company acquiring Sabina’s 100% owned Back River Gold District located in Nunavut, Canada by issuing approximately 216 million common shares of B2Gold as consideration. The Back River Gold District consists of five mineral claims blocks along an 80 kilometer belt. Construction is underway at the most advanced project in the district, the Goose Project, and is on schedule for first gold pour in the first quarter of 2025.

 

On June 23, 2023, the Company announced an initial capital expenditure estimate of C$800 million, which was in line with B2Gold expectations since the Sabina acquisition announcement and reflects scope changes to further optimize the Goose Project. B2Gold has updated the construction budget to de-risk the project and construct a reliable and low operating cost mine for the arctic. In addition, the Company has made the decision to accelerate underground mining development to increase annual gold production over the first five years of the mine plan, which entails mining of the complete Umwelt crown pillar. The cost to accelerate underground mining is estimated at an additional C$90 million for a total project expenditure of C$890 million of which Sabina had incurred approximately C$340 million up to April 2023, leaving approximately C$550 million (approximately $418 million) expected to be spent by B2Gold from the date of acquisition and up to completion of construction in the first quarter of 2025. In the third quarter of 2023 and post-acquisition to September 30, 2023, the Company incurred $88 million and $157 million, respectively for construction activities at the Goose Project.

 

In addition, B2Gold will undertake a buildup of working capital over the Goose Project construction period up to the first quarter of 2025 in order to materially de-risk the execution of the production ramp-up phase. Areas of focus for working capital include; accelerated purchase and additional storage of diesel fuel to manage the requirements of operations in 2025; critical inventory of consumables and spares required for mining and processing to avoid the requirement for air transport; and development of open pit and underground ore stockpiles to provide a consistent and uninterrupted feed to the process plant. In the third quarter of 2023, $41 million of consumables inventory costs were incurred, including long-term consumables of $30 million.

 

Goose Project Infrastructure

 

Marine Laydown Area

 

Following the acquisition of Sabina, the Marine Laydown Area located on Bathurst Inlet, Nunavut was reorganized to maximize space for the 2023 sealift. Additionally, the fuel tank containment area at the MLA was enlarged to facilitate increased storage. The MLA has an approximately 70 person camp, a 3,000 foot gravel airstrip and heliport, and over 65,000 square meters of outdoor storage area. The purchasing of materials and supplies needed to support the 2024 construction campaign has been completed and all materials provided to the ports for the 2023 sealift, which was successfully completed in mid-October 2023 with a total shipping volume of 90,000 cubic meters of dry cargo and 24,000,000 liters of arctic grade diesel fuel. This includes all planned material sealift materials required for the successful construction, commissioning and mining of the Goose Project. Current activities at the MLA include maintenance and preparation of the winter ice road (“WIR”) construction and haulage fleet and staging all materials for shipment on the WIR to the Goose Project site. Additional materials identified will need to be flown to site on an as-needed basis.

 

Accommodation Complex

 

Phase 1 of the accommodation complex opened in July 2023, including sleeping quarters, office area, medical center, gymnasium, kitchens and water treatment. Phase 1 of the accommodation complex includes 310 beds at the permanent site location, which together with the 160 beds located at the existing exploration camp, provide the necessary accommodations to support accelerated construction, mining and exploration activities to ensure an on-time project completion. Phase 2 of the accommodation complex will further expand the permanent camp. Phase 2 materials are at the MLA and are ready for transport to the Goose Project site and will be integrated into the complex prior to the 2024 summer construction season.

 

Concrete and Steel Work

 

Concrete and steel work in the mill area are progressing ahead of schedule. The first concrete pour was completed in July 2023, with approximately 40% of the 2023 concrete foundations and pads complete within the mill area, powerhouse and truck shop as of September 30, 2023. Over 2,000,000 kilograms of structural steel and approximately 500,000 kilograms of plate steel has arrived at site. Erection of the structural steel for the mill area, power house and truck shop is well underway, and cladding of the mill area has begun. Enclosure of these buildings will allow for work to continue through the colder months and remain on schedule. Additionally, it is expected that the ball mill will be set in place in December 2023, ahead of schedule, allowing the focus for the start of 2024 to shift to piping and mechanical systems. Progress to date has considerably de-risked the Goose Project.

 

Winter Ice Road

 

The 163 kilometer WIR between the MLA and the Goose Project will operate between February and the end of April, depending on temperatures. In 2023, over 800 loads were completed along the WIR. Work on the 2024 WIR is expected to start in December 2023. WIR construction will begin from the middle and work outwards in each direction, allowing for completion of the majority of the road before the sea ice freezes, as the sea ice freezes last. This construction strategy should enable the WIR to be completed earlier than in prior seasons.

 

Airstrip

 

Earthworks necessary to extend the airstrip were completed in September 2023. The extension of the airstrip to 5,000 feet allows large capacity, fully loaded passenger planes to land at the Goose Project during the 2024 construction campaign. B2Gold expects that this will make employee and contractor rotations and supplying the site from Edmonton significantly easier and will further de-risk the project.

 

The Company believes that the Back River Gold District includes significant untapped exploration potential across the 80 kilometer belt. To accelerate pursuing this potential, in the second quarter, B2Gold approved a $20 million exploration budget for the balance of 2023 to complete approximately 25,000 meters of drilling. The $20 million budget is significantly higher than historical annual exploration expenditures. Drilling has been and will continue to be focused in proximity to existing deposits at the Goose Project, as well as following up on regional targets identified at the George, Boulder, Boot and Del projects.

 

Fekola Complex Regional Development and Exploration

 

The Fekola Complex is comprised of the Fekola Mine (Medinandi permit hosting the Fekola and Cardinal pits and Fekola underground) and Fekola Regional (Anaconda Area (Bantako, Menankoto and Bakolobi permits) and the Dandoko permit).

 

Based on B2Gold’s preliminary planning, the Anaconda Area could provide selective higher grade saprolite material (average annual grade of up to 2.2 g/t gold) to be trucked approximately 20 km and fed into the Fekola mill at a rate of up to 1.5 million tonnes per annum. Trucking of selective higher grade saprolite material from the Anaconda Area to the Fekola mill will increase the ore processed and has the potential to generate approximately 80,000 to 100,000 ounces of initial gold production per year from Fekola Regional sources (Fekola Regional Phase I). Receipt of an exploitation license for the Bantako North permit area remains outstanding pending finalization of an implementation decree for the new 2023 Mining Code by the State of Mali. As a result, no production is forecast from Fekola Regional in 2023 (budgeted production was 18,000 ounces). The new 2023 Mining Code is not expected to impact the matters that have been stabilized for the Fekola Mine operations under the existing Fekola mining convention entered into under the 2012 Mining Code, and the impact of a new 2023 Mining Code on the Fekola Regional licenses is still under review by the Company, pending issuance of a final implementation decree by the State of Mali.

 

In the third quarter of 2023 and the first nine months of 2023, the Company invested $17 million and $46 million, respectively, in the development of Fekola Regional (Anaconda Area) saprolite mining including road construction, mine infrastructure and mining equipment. For 2023, the Company has budgeted a total of $63 million for Fekola Regional development. The haul road from Bantako North to Fekola is operational and construction of the haul roads and mining infrastructure (warehouse, workshop, fuel depot and offices) is on schedule and will be completed in the fourth quarter of 2023. Mining operations will commence upon receipt of mining permits, with gold production approximately three months after commencement. For 2023, the Company expects to be below budget on the Fekola Regional development by approximately $12 million.

 

Preliminary results of a Fekola Complex optimization study indicate that there is an opportunity to either (1) extend the processing life of the Fekola mill, or (2) increase gold production through the construction of a new oxide processing plant. The Company is progressing an engineering study to be released in the first quarter of 2024 that will outline the two development options to process gold from Fekola Regional. In addition, Fekola Complex optimization work continues to maximize project value from all the various oxide and sulphide materials sources including the Fekola Pit, Fekola Underground, Cardinal Pit and the Bantako North, Menankoto, Bakolobi and Dandoko permits. Extending the oxide and sulphide processing life of the Fekola mill or construction of a new oxide processing plant is subject to delineation of additional mineral resources and development, completion of feasibility studies and the receipt of all necessary regulatory approvals and permits.

 

Gramalote Project Development

 

On September 14, 2023, the Company entered into a purchase agreement with AngloGold to acquire AngloGold’s 50% interest in the Gramalote Project. Upon completion of the Gramalote Transaction, which occurred on October 5, 2023, B2Gold now owns 100% of the Gramalote Project.

 

B2Gold’s in-house projects team has commenced work on various smaller scale project development plans, with the goal of identifying a higher-return project than the previously contemplated joint venture development plan. Based on the results of the 2022 Gramalote feasibility study, the contemplated larger scale project did not meet the combined investment return thresholds for development by both B2Gold and AngloGold. B2Gold plans to commence a detailed review of the Gramalote Project, including the facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller scale project. The results of the review will allow the Company to determine the optimal parameters and assumptions for a formal study, to commence in the fourth quarter of 2023, with the goal of completing an initial assessment by the second quarter of 2024.

 

Outlook

 

Based on a strong operational and financial first nine months of 2023, B2Gold is on track to meet its annual total gold production forecast of between 1,000,000 and 1,080,000 ounces (including 60,000 to 70,000 attributable ounces from Calibre) with total consolidated cash operating costs for the year (including estimated attributable results from Calibre) now forecast to be slightly below the original guidance range of between $670 and $730 per ounce and total consolidated all-in sustaining costs (including estimated attributable results for Calibre) are forecast to be at the low end of the original guidance range of between $1,195 and 1,255 per ounce.

 

In April 2023, the Company completed the acquisition of Sabina resulting in B2Gold acquiring Sabina’s 100% owned Back River Gold District located in Nunavut, Canada. The Back River Gold District consists of five mineral claims blocks along an 80 kilometer belt. The most advanced project in the district, Goose, is fully permitted, under construction, and has been de-risked with significant infrastructure currently in place. The Goose Project has an estimated two year construction period, which is expected to be completed in the first quarter of 2025. In addition, B2Gold believes there is significant untapped exploration potential across the 80 kilometer belt. B2Gold’s management team has strong northern construction expertise and experience to deliver the fully permitted Goose Project and the financial resources to develop the significant gold resource endowment at the Back River Gold District into a large, long life mining complex.

 

In Mali, preliminary results of a Fekola Complex optimization study indicate that there is an opportunity to either (1) extend the processing life of the Fekola mill, or (2) increase gold production through the construction of a new oxide processing plant. The Company is progressing an engineering study to be released in the first quarter of 2024 that will outline the two development options to process gold from Fekola Regional. In addition, Fekola Complex optimization work continues to maximize project value from all the various oxide and sulphide material sources including the Fekola Pit, Fekola Underground, Cardinal Pit and the Bantako North, Menankoto, Bakolobi and Dandoko permits. Extending the oxide and sulphide processing life of the Fekola mill or construction of a new oxide processing plant is subject to delineation of additional mineral resources and development, completion of feasibility studies, and the receipt of all necessary regulatory approvals and permits.

 

Due to the Company’s strong financial position and available liquidity, strong operating results and cash flows and the current higher gold price environment, B2Gold’s quarterly dividend rate is expected to be maintained at $0.04 per common share (or an annualized rate of $0.16 per common share), which represents one of the highest dividend yields in the gold sector.

 

B2Gold is conducting another aggressive exploration campaign in 2023 with a budget of approximately $84 million (including $20 million at the recently acquired Back River Gold District) with a significant proportion allocated to growth exploration expenditures to support the next phase of organic growth across the portfolio.

 

The Company’s ongoing strategy is to continue to maximize profitable production from its mines, further advance its pipeline of development and exploration projects, evaluate new exploration, development and production opportunities and continue to pay an industry leading dividend yield.

 

Appointment of Kelvin Dushnisky as Chair of the Board of Directors of B2Gold

 

Following his election as a director of B2Gold on June 23, 2023, Kelvin Dushnisky was appointed as Chair of the Board of Directors of the Company. Mr. Dushnisky served as Chief Executive Officer and a member of the Board of Directors of AngloGold from 2018 to 2020. There he led the execution of the organization’s strategic priorities and oversaw a global portfolio of mining operations and projects in Africa, South America and Australia, along with exploration interests and investments in Canada and the USA. Prior to AngloGold, Mr. Dushnisky had a sixteen-year career with Barrick Gold Corporation, ultimately as its President and a member of the Barrick Board of Directors. Prior to Barrick, Mr. Dushnisky held senior executive and board positions with a number of private and listed companies.

 

About B2Gold

 

B2Gold is a low-cost international senior gold producer headquartered in Vancouver, Canada. Founded in 2007, today, B2Gold has operating gold mines in Mali, Namibia and the Philippines, a mine under construction in northern Canada and numerous development and exploration projects in various countries including Mali, Colombia and Finland. B2Gold forecasts total consolidated gold production of between 1,000,000 and 1,080,000 ounces in 2023.

 

Qualified Persons

 

Bill Lytle, Senior Vice President and Chief Operating Officer, a qualified person under NI 43-101, has approved the scientific and technical information related to operations matters contained in this news release.

 

Brian Scott, P. Geo., Vice President, Geology & Technical Services, a qualified person under NI 43-101, has approved the scientific and technical information related to exploration and mineral resource matters contained in this news release.

 

 

 

B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(Expressed in thousands of United States dollars, except per share amounts)
(Unaudited)

 
  For the three
months ended
Sept. 30, 2023
  For the three
months ended
Sept. 30, 2022
  For the nine
months ended
Sept. 30, 2023
  For the nine
months ended
Sept. 30, 2022
               
Gold revenue $ 477,888     $ 392,554     $         1,422,298     $ 1,140,122  
               
Cost of sales              
Production costs   (171,425 )     (185,704 )     (451,791 )     (466,967 )
Depreciation and depletion   (101,568 )     (94,207 )     (293,388 )     (253,344 )
Royalties and production taxes   (34,389 )     (26,644 )     (102,661 )     (76,235 )
Total cost of sales   (307,382 )     (306,555 )     (847,840 )     (796,546 )
               
Gross profit   170,506       85,999       574,458       343,576  
               
General and administrative   (13,064 )     (10,384 )     (41,170 )     (33,761 )
Share-based payments   (4,289 )     (5,808 )     (15,734 )     (18,253 )
(Impairment) reversal of impairment of long-lived assets   (111,597 )           (116,482 )     909  
Write-down of mineral property interests   (565 )     (3,927 )     (17,022 )     (7,085 )
Share of net income of associate   5,561       2,080       17,549       8,991  
Restructuring charges   (5,071 )           (12,151 )      
Foreign exchange losses   (11,739 )     (7,982 )     (14,588 )     (16,439 )
Community relations   (1,158 )     (873 )     (3,883 )     (1,945 )
Loss on sale of mineral property         (2,804 )           (2,804 )
Other expense   (1,061 )     (1,776 )     (8,396 )     (2,746 )
Operating income   27,523       54,525       362,581       270,443  
               
Interest and financing expense   (3,190 )     (2,709 )     (9,032 )     (7,983 )
Interest income   3,887       3,168       15,741       7,796  
Change in fair value of gold stream   7,600             6,500        
Gains (losses) on derivative instruments   5,667       (8,751 )     6,092       18,297  
Other income (expense)   (951 )     453       (5,069 )     6,513  
Income from operations before taxes   40,536       46,686       376,813       295,066  
               
Current income tax, withholding and other taxes   (68,210 )     (32,520 )     (216,155 )     (140,315 )
Deferred income tax expense   (7,096 )     (35,400 )     (1,674 )     (44,496 )
Net (loss) income for the period $ (34,770 )   $ (21,234 )   $ 158,984     $ 110,255  
               
Attributable to:              
Shareholders of the Company $ (43,070 )   $ (23,410 )   $ 123,321     $ 95,117  
   Non-controlling interests   8,300       2,176       35,663       15,138  
Net (loss) income for the period $ (34,770 )   $ (21,234 )   $ 158,984     $ 110,255  
               
(Loss) earnings per share (attributable to shareholders of the Company)              
Basic $ (0.03 )   $ (0.02 )   $ 0.10     $ 0.09  
Diluted $ (0.03 )   $ (0.02 )   $ 0.10     $ 0.09  
               
Weighted average number of common shares outstanding
(in thousands)
             
Basic   1,297,175       1,064,301       1,208,942       1,060,826  
Diluted   1,297,175       1,064,301       1,213,349       1,067,753  

 

 

B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30
(Expressed in thousands of United States dollars)
(Unaudited)

 

 
  For the three
months ended
Sept. 30, 2023
  For the three
months ended
Sept. 30, 2022
  For the nine
months ended
Sept. 30, 2023
  For the nine
months ended
Sept. 30, 2022
Operating activities              
Net (loss) income for the period $ (34,770 )   $ (21,234 )   $ 158,984     $ 110,255  
Mine restoration provisions settled   (344 )           (923 )      
Non-cash charges, net   226,559       160,355       455,500       331,700  
Changes in non-cash working capital   (28,339 )     (34,362 )     (7,061 )     (87,833 )
Changes in long-term supplies inventory           (30,407 )           (30,407 )      
Changes in long-term value added tax receivables           (22,495 )     (11,641 )     (67,083 )     (28,815 )
Cash provided by operating activities   110,204       93,118       509,010       325,307  
               
Financing activities              
Extinguishment of gold stream and construction financing obligations               (111,819 )      
Repayment of equipment loan facilities           (3,448 )     (879 )     (9,913 )     (12,374 )
Interest and commitment fees paid           (1,343 )     (725 )     (3,463 )     (3,049 )
Cash proceeds from stock option exercises   6,486       335       12,394       12,966  
Dividends paid   (45,378 )     (42,949 )     (140,084 )     (127,695 )
Principal payments on lease arrangements   (1,135 )     (1,732 )     (4,624 )     (5,399 )
Distributions to non-controlling interests   (13,601 )     (23,648 )     (17,881 )     (27,828 )
Revolving credit facility transaction costs   (3,296 )           (3,296 )     (2,401 )
Other   2,434       1,788       4,021       2,518  
Cash used by financing activities   (59,281 )     (67,810 )     (274,665 )     (163,262 )
               
Investing activities              
Expenditures on mining interests:              
Fekola Mine   (83,166 )     (20,353 )     (211,112 )     (68,779 )
Masbate Mine   (5,896 )     (10,158 )     (20,947 )     (29,908 )
Otjikoto Mine   (13,290 )     (20,292 )     (46,266 )     (59,575 )
Goose Project   (88,082 )           (156,694 )      
Fekola Regional, pre-development   (16,535 )     (5,154 )     (46,345 )     (12,083 )
Gramalote Project   (854 )     (4,273 )     (2,568 )     (12,810 )
Other exploration and development   (17,770 )     (16,269 )     (58,313 )     (45,505 )
    Cash acquired on acquisition of Sabina Gold & Silver Corp.               38,083        
   Transaction costs paid on acquisition of Sabina Gold & Silver Corp.               (6,672 )      
Purchase of long-term investment   (879 )           (32,759 )      
Cash paid for purchase of non-controlling interest               (6,704 )      
Deferred consideration received         45,000       3,850       45,000  
Cash paid on acquisition of mineral property                     (48,258 )
Cash paid on acquisition of Oklo Resources Ltd         (21,130 )           (21,130 )
Cash acquired on acquisition of Oklo Resources Ltd         1,415             1,415  
    Loan to associate   (2,453 )     (5,000 )     (2,453 )     (5,000 )
Cash paid on exercise of mineral property option                     (7,737 )
Funding of reclamation accounts   (2,189 )     (954 )     (4,829 )     (5,052 )
Other   (3,833 )     1,626       (4,191 )     1,268  
Cash used by investing activities   (234,947 )     (55,542 )     (557,920 )     (268,154 )
               
Decrease in cash and cash equivalents   (184,024 )     (30,234 )     (323,575 )     (106,109 )
               
Effect of exchange rate changes on cash and cash equivalents   (12,614 )     (7,002 )     (18,802 )     (17,434 )
Cash and cash equivalents, beginning of period   506,207       586,692       651,946       672,999  
Cash and cash equivalents, end of period $ 309,569     $ 549,456     $ 309,569     $ 549,456  

 

 

B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Unaudited)

 

 
  As at September 30,
2023
  As at December 31,
2022
Assets      
Current      
Cash and cash equivalents $ 309,569     $ 651,946  
Accounts receivable, prepaids and other   32,597       28,811  
Deferred consideration receivable         3,850  
Value-added and other tax receivables   21,534       18,533  
Inventories   343,628       332,031  
    707,328       1,035,171  
       
Long-term investments   78,229       31,865  
Value-added tax receivables   168,306       121,323  
Mining interests      
Owned by subsidiaries and joint operations   3,593,868       2,274,730  
Investments in associates   132,713       120,049  
Long-term stockpile   55,470       48,882  
Long-term stockpiles   46,855        
Other assets   68,879       49,213  
  $ 4,851,648     $ 3,681,233  
Liabilities      
Current      
Accounts payable and accrued liabilities $         176,931     $ 114,791  
Current income and other taxes payable   111,171       95,623  
Current portion of long-term debt   15,145       15,519  
Current portion of mine restoration provisions   4,622       5,545  
Other current liabilities   16,804       2,138  
    324,673       233,616  
       
Long-term debt   34,309       41,709  
Gold stream obligation   120,800        
Mine restoration provisions   94,301       95,568  
Deferred income taxes   184,189       182,515  
Employee benefits obligation   18,729       8,121  
Other long-term liabilities   8,707       7,915  
    785,708       569,444  
Equity      
Shareholders’ equity      
Share capital   3,448,404       2,487,624  
Contributed surplus   80,478       78,232  
Accumulated other comprehensive loss   (132,511 )     (145,869 )
Retained earnings   560,226       588,139  
    3,956,597       3,008,126  
Non-controlling interests   109,343       103,663  
    4,065,940       3,111,789  
  $ 4,851,648     $ 3,681,233  
       

 

Posted November 9, 2023

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